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Friday, October 4, 2019

Market Update Oct 4, 2019 - "Why Is The Market Up" - Part 2

This morning I ran into trouble with (blogger) save errors, so I had to remove some links, and break it up into 2 Parts. I'm still getting random errors, but I'm hoping to wrap this up before the opening bell. 

Yesterday Morning: The pulled back into our support target, and the $VIX was slammed back down below 21, which I alerted to in real time in the chart annotations - on the 15 min $SPX chart. 

 From there we saw a nice rally back above the 2900 level, where I didn't feel comfortable chasing it. I'd like to see the market pullback, and build a base, before moving higher, but you know how that usually goes. 

Found a rather interesting pattern on the $TRAN chart, and in case you didn't know it, $TRAN is a leader for the DOW.  Looks like 6 months of bullish consolidation to me, and considering the fact that the financial fake news was beating the bear drum on airlines yesterday, there's a good chance all the bad news is priced in. It's been nearly a year, since the IMF warned of a global slow-down. 

$TRAN - could see another retest of support, or even a little shakeout....  but watch for a breakout above the 9800 level. This is the one to watch!

Oil and, the energy sector usually run hand in hand, so let's take a look at oil. I was correct when I remained bearish on the Saudi short squeeze, but then I got it wrong, as the trend continued to break, and the $USO continued to sell-off below the 200 day ma. I assume you know where to cut your losses...  

Oil - has given back that entire Sept rally, but yesterday it finally bounced out of the hole, and with it, the Oil service sector.

$BRENT - back above support after a little shakeout.... $TRAN reversal, Market reversal, Oil reversal?


WTI Crude - I don't have an upside target, yet this is key support, and another bullish hammer

Remember what I was saying yesterday about ETF's, not really tracking the underlying index too well. Actually, I was talking moving averages, but the later also true.

The $USO remains in a bearish channel (seen in blue), and you can't really find the bottom, using this ETF chart. The bearish channel is valid, but the rest of the chart, not so much.

One more thing. I alerted to the volume in oil, on the weekly BRENT crude chart, and you can see it's up. I think we get a nice bounce here, but if that pink line breaks, bad things are going to happen. I wouldn't even trade oil unless you're experienced.... and it's safer to wait for confirmation of the trend reversal. Just be careful, and know your risk tolerance.

As far as the rest of the market is concerned. DOW 26.1 becomes support, although the candle looks more like a hanging man, than a bullish hammer. Support is the 200 day ma, and resistance is the gap left behind at the 50 day ma. Pretty simple. 


I think I don't have the time to complete Part 1, of this update, and I plan to be away from my desk most the day. I'll chart the open, and set the public charts to auto-refresh, and check them when I have time. 

Good luck,

I'll be away from my desk most the day.

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